NatWest makes first-ever VC fund bet, backing Phoenix Court's Monzo-and-Raspberry-Pi portfolio

NatWest has made its first-ever direct limited-partner commitment to an independently managed venture capital fund, investing across London firm Phoenix Court's Localglobe, Latitude and Solar funds as part of a partnership set to bring several hundred million pounds of institutional capital onto the platform.¹ The British Business Bank separately committed £50 million to the same funds, with M&G and HSBC also backing Phoenix Court's strategies; NatWest did not disclose the size of its own stake.¹ "If Britain wants to compete for the industries and jobs of the future, we need to get better at backing our most promising companies with the capital, connections and confidence to scale here in the UK," said NatWest chief executive Paul Thwaite, framing the move as an extension of the bank's Venture Banking business launched earlier this year.¹

Phoenix Court's three funds span the innovation lifecycle (Localglobe backs companies from seed stage, Latitude at growth stage, and Solar at scale-up), and its portfolio already includes British tech names Monzo, Raspberry Pi, Tide and Motorway.¹ Co-founder and chair Saul Klein pointed to Solar's pilot cohort as proof of the model: 18 companies generating £5 billion in combined annual revenue and employing more than 8,500 people in the UK, a pilot M&G backed with an earlier £50 million commitment.² "This meaningful partnership with British financial institutions like NatWest will help us back more exceptional companies from seed to scale, keeping more of the jobs, prosperity and returns they create in Britain," Klein said.²

The British Business Bank's stake in Phoenix Court's funds is its second major anchor commitment to UK growth-stage venture capital in under three weeks: on 7 September it made a £75 million cornerstone commitment to Molten Ventures' new Growth Fund I, which closed its first £175 million tranche on the back of that money.³ The state-backed lender says the UK is the world's third-largest venture capital market yet more than 80% of the scale-up funding raised by its most successful companies still comes from overseas investors, the exact gap both the Molten and Phoenix Court commitments are designed to narrow.¹

Why it matters: A high-street bank taking its first-ever direct stake in a VC fund, arriving weeks after the state development bank anchored a second growth-stage fund in a month,¹³ shows UK institutional money moving from merely banking VC-backed startups to becoming LPs in the funds themselves, a structural shift, not a one-off deal, aimed squarely at keeping domestic scale-up returns onshore.